If you are a W-2 salesperson

Are my commissions protected by law?

Yes, once they are earned. New York defines "wages" to include earnings "determined on a time, piece, commission or other basis" (Labor Law § 190(1)). An earned commission has the same protection as your paycheck.

Not every payment counts. A bonus that comes out of a company-wide pool, depends on the company's overall results and is divided at management's discretion is not a wage. The employee lost on that point in Truelove. Pay tied to your own sales under a set formula is on the protected side of the line. The Department of Labor draws the line the same way: a true bonus is one where “both the fact and amount of payment are wholly at the discretion” of the employer, but if you are “given reason to believe” that a certain level of sales will earn a certain amount, the money is a commission (Department of Labor, Payment of Commissions FAQ).

A bonus can be a wage too. When an employer promises a bonus as part of your pay for your own work, and the bonus is guaranteed rather than left to management’s discretion, it is a wage once you earn it. That held even for an oral promise made to an employee who had signed at-will acknowledgments, and the employee recovered the bonus plus attorney’s fees (Ryan).

My plan says the company has "sole discretion." Is that the end of it?

As to the amount of a bonus, usually yes. Where a written plan or contract clearly leaves a bonus to management’s discretion, courts enforce the writing, and evidence of past practice or of what you were told generally cannot override it (Namad; Hunter). In the second case the employees called their pay "commissions," but the written terms made it a discretionary bonus, so it was not a wage. Conditions a written plan attaches to a bonus, such as receiving a formal award notice before you leave, are also enforced (Hall).

There are two limits. First, discretion over a bonus does not reach commissions you already earned under a formula. Those are wages and cannot be forfeited (see My plan says I am not owed the commission). Second, in 2026 the Court of Appeals held that a party’s "sole discretion" over a contract right "does not exculpate that party from complying with the implied covenant" of good faith and fair dealing with respect to that right (111 West 57th). Discretion may not be used arbitrarily, irrationally or in bad faith to destroy what the other side bargained for. That was a commercial loan case, the Court said it was applying settled law, and no court has yet applied it to an employee’s pay. It does not limit discretion to end the relationship itself, and the covenant cannot override the contract’s express terms. But it answers the doubt some courts had expressed about whether a good-faith claim can coexist with a grant of discretion, and it gives an employee whose discretionary pay was cut or withheld for a bad-faith reason, such as retaliation for a complaint, a firmer basis for the argument. The burden of proving bad faith remains heavy.

My employer just didn't pay my bonus. Is that a wage claim?

If the bonus is a wage, yes. That means a bonus promised as part of your pay for your own work and earned under its terms, not one left to management’s discretion (see above). A wage claim adds attorney’s fees and, in many cases, liquidated damages to what a contract claim would recover.

Since August 19, 2021 the Labor Law has said there is "no exception to liability . . . for the unauthorized failure to pay wages" (§ 193(5)). The Legislature added that sentence to counteract decisions holding that an employer who withheld a payment entirely, rather than deducting part of it, had not violated § 193. Its findings say that failing to pay wages “has always been encompassed” by § 193, and cite Ryan as correctly holding so. Appellate courts have since applied it to an unpaid nondiscretionary annual bonus (Neu) and to unpaid severance owed to a highly paid executive (Patel). Being an executive is not a bar. You can bring the wage claim alongside a breach of contract claim, but you still need an enforceable right to the pay in the first place. And complaining that a bonus was unlawfully withheld is protected: an employer that fires you for the complaint can be liable for retaliation (§ 215; Neu).

For pay withheld before August 19, 2021, the answer depends on where the case is heard. The First Department (Manhattan and the Bronx) holds that the amendment does not apply retroactively and that, before it, a wholesale withholding was not a "deduction," and it dismissed § 193 claims on that basis in 2026 (Fisher). The Second Department (Brooklyn, Queens, Staten Island, Long Island, Westchester and the lower Hudson Valley) has treated an employer’s withholding of earned pay as a § 193 violation without relying on the amendment (Okeke). The Fourth Department (western and central New York) holds that the amendment is retroactive (Hernandez). Wage claims generally must be brought within six years, so this question affects only pay that came due in roughly the year before the amendment, and it will stop mattering in 2027.

For lawyers: notes on pleading, proof and timing, and the argument on older pay.

Am I entitled to a written commission plan?

Yes. New York requires the agreed terms for a commissioned salesperson to be put in writing (§ 191(1)(c)). The writing must be signed by both you and the employer, explain how your pay is calculated, state how often any recoverable draw is reconciled, and say what happens to your pay if either side ends the job. The employer must keep it for three years. You are also entitled to a wage notice when you are hired that states how you are paid (§ 195(1)).

If the employer cannot produce the written plan when the New York State Department of Labor asks for it, your account of the terms is presumed correct. The presumption is triggered by the Department's request, not by yours, which is one practical reason to file a Department of Labor complaint when there is no written plan.

If you are paid on a 1099 but the company runs your day, read Am I really an independent contractor? first: the label on your pay does not decide the question.

Who is covered. These writing and timing rules protect employees whose main job is selling and who are paid at least partly by commission. They do not cover employees whose main job is supervisory, managerial, executive or administrative (§ 190(6)). A sales manager still has the protections against deductions and the remedies described below.

When is a commission "earned"?

When you have done the selling — which can be before the sale is consummated, and before the invoicing and collection that follow it. You do not need a written plan to earn a commission. The employer is required to put the plan in writing, but its failure to do so does not cancel your right to be paid. Nor does the Statute of Frauds: when employment is terminable at will and the pay “has become fixed and earned” during the employment, an oral agreement is enforceable even if the amount is calculated later (Cron v Hargro Fabrics, 91 N.Y.2d 362, 370 (1998)). A promise to keep paying you commissions on an account for as long as it keeps ordering, after you leave, is different: the Court of Appeals holds that it must be in writing (Zupan v Blumberg, 2 N.Y.2d 547, 550 (1957)). New York's highest court has held that when a commission is earned depends on the parties' agreement, "express or implied," and that an implied agreement can be shown by how the company actually paid commissions over time. If there is no agreement on the point, a commission is earned when the salesperson produces a buyer ready, willing and able to buy (Pachter). "The lack of a specific written contract is not determinative."

The New York State Department of Labor applies the same rule in three steps: the time stated in the written plan; if the plan is silent, the parties’ past dealings; and if there are none, when the salesperson produces a person “ready, willing, and able to enter into a contract upon the employer’s terms.” Once earned, the commission is a wage (Department of Labor, Payment of Commissions FAQ). The FAQ is the agency’s guidance, not a statute or a court decision, but it is the published position of the agency that takes wage complaints.

If the plan is unclear, it is read against the company. The employer almost always writes the plan, and New York courts construe an employer-drafted commission agreement against the drafter. Had the employer “meant to foreclose” a commission, it “could have said so explicitly” (Yudell; Arbeeny). That rule helps, but it does not win a case by itself: in Yudell the court still sent the dispute to trial.

A written plan can set out how commissions are calculated, and courts have enforced formula terms such as netting out returns. But a plan cannot take away a commission you have already earned, whatever it says. See the next question.

What to do: document what you did on each deal and when you did it — the lead, the quote, the signed agreement, any deposit or implementation fee. Then find the sentence in your plan, if there is one, that says when a commission is earned. How the company paid other salespeople in the same situation is also evidence of the real terms.

A shorter answer to this one question: When is a sales commission earned in New York?

When must my commissions be paid?

At least once a month, and no later than the last day of the month after the month in which they were earned (§ 191(1)(c)). A commission earned in February is due by March 31. If your plan says commissions are earned at the end of a quarter, a commission earned on March 31 is due by April 30. The plan can set an earlier payment date, not a later one.

The exception for extra pay. If your regular monthly (or more frequent) pay of salary, draw or commissions is “substantial,” the statute lets the employer pay “additional compensation,” including “extra or incentive earnings, bonuses and special payments,” less often than monthly, “but in no event later than the time provided in the employment agreement or compensation plan” (§ 191(1)(c)). That is how a quarterly accelerator or an annual incentive can lawfully be paid on a longer cycle. It never lets the employer pay later than its own plan says. Whether it can reach ordinary commissions — for example, deferring the commissions of a salesperson whose salary is substantial — the text does not settle. The one decision we have found that applied the exception, a 2021 federal trial court ruling, treated a salesperson’s twice-yearly commissions as covered, but only because both sides agreed her pay was substantial, so the point was not argued; it then held she had stated a claim because the company paid three to five months after the dates it had agreed to (Zuckerman v. GW Acquisition LLC, 2021 WL 4267815, at *15–16 (S.D.N.Y. Sept. 20, 2021)). Our view is that ordinary commissions stay on the monthly schedule: the proviso counts commissions among the regular pay that must be substantial, and the examples it gives of “additional compensation” are extras such as incentives and bonuses. The statute does not define “substantial,” and we have not found a New York appellate decision that does.

You can ask for a statement of what you are owed. On your written request, the employer “shall furnish a commission salesperson … a statement of earnings paid or due and unpaid” (§ 191(1)(c)). Make the request in writing, keep a copy, and keep the answer. It is often the quickest way to learn what the company thinks it owes you.

You may have read otherwise. Several widely read pages say commissions must be paid within five days after you leave. That rule is for independent sales representatives, and the statute defines a sales representative as someone not covered by the employee rules “because he or she is an independent contractor” (§§ 191-a(d), 191-c; see the 1099 guide); an employee’s commissions follow the monthly rule above, and final wages are due by the next regular payday (§ 191(3)). Others say a commission is earned only when the merchandise has been “delivered to, accepted by, and paid for by the customer.” That definition is in § 191-a and applies to wholesale sales representatives when their contract is silent, not to employees. And older articles put liquidated damages at 25%; today it is an amount equal to 100% of the unpaid wages unless the employer proves a good-faith basis (§ 198(1-a)).

My plan says I am not owed the commission. Doesn't that settle it?

No. Commission plans often contain terms that violate the Labor Law, and those terms are unenforceable no matter how clearly they are written or whether you signed. Parties "are not free to enter into contracts which violate public policy," so an employee "could not contract to forfeit" earned wages, and New York's "long standing policy against the forfeiture of earned wages . . . applies to earned, uncollected commissions as well" (Weiner).

Plan terms that commonly fail against earned commissions:

• "You must be employed on the payment date." It cannot cancel a commission you had otherwise earned (Arbeeny; Zia-Ul-Haq).
• Chargebacks and clawbacks of earned commissions. The Labor Law allows only a short list of deductions (§ 193), and a plan clause "authorizing" chargebacks is not on it. Neither is a demand that you write a check back (§ 193(3)(a)). Since 2021 the statute adds that there is "no exception to liability . . . for the unauthorized failure to pay wages" (§ 193(5)). See Gennes and Karic.
• Long holds on a departing salesperson's pay. Commissions are due at least monthly, by the end of the month after they are earned (§ 191(1)(c); see When must my commissions be paid?), and final wages by the next regular payday (§ 191(3)). "No employee shall be required as a condition of employment to accept wages at periods other than as provided in this section" (§ 191(2)).
• "By continuing to work, you accepted the change." Silence does not rewrite a written plan (Karic).
• Calling a formula commission a "discretionary bonus." The label does not control (Zia-Ul-Haq; compare Truelove).

The line to remember: a plan can decide how commissions are calculated for sales going forward. It cannot take away a commission once you have earned it.

Can my employer take back a commission it already paid?

Not once it is earned. Courts have rejected chargebacks against earned commissions for a customer who did not renew (Gennes) and for vehicle damage, mechanical problems and discipline (Karic). The company, not the salesperson, carries the business risk.

The exception is built into the definition of "earned." If the plan says a commission is not earned until returns, cancellations or negative growth are netted out, those adjustments are usually part of calculating the commission rather than a deduction from it (Cohan; Pachter).

And an employer that overpays may not be able to get the money back. Suppose a commission was paid and the sale was later cancelled, or the company paid more than the plan’s formula allowed. While you are employed, the company cannot simply deduct it from your pay: the Labor Law permits only a short list of deductions (§ 193), an overpayment may be recovered through payroll only if it came from a mathematical or clerical error, within eight weeks, with notice, and capped at 12.5% of gross wages (12 NYCRR 195-5.1), and the company may not get around that by demanding that you repay it separately (§ 193(3)(a)). Once you have left, the company’s only route is to sue you as an individual for breach of contract or unjust enrichment — a claim that is often not worth pursuing against one former employee, and that may fail on the law. New York’s voluntary payment doctrine “bars recovery of payments voluntarily made with full knowledge of the facts, and in the absence of fraud or mistake of material fact or law” (Dillon, 100 N.Y.2d at 526). No New York appellate court has yet applied it to a commission, so treat it as an argument rather than an answer; but the First Department has held it a live defense to an employer’s claim to recover compensation it had already paid, with triable issues on whether the employer paid knowing the facts, whether it was mistaken, whether it showed a “marked lack of diligence,” and whether it had clean hands (New York Eye & Ear Infirmary, 200 A.D.3d at 468). The same limits apply when a company pays a disputed commission to a second salesperson.

What about my draw? Do I have to pay it back?

• A non-recoverable or guaranteed draw is yours, even in a bad month.
• A recoverable draw offset against future commissions. Where the plan clearly says commissions are earned only after the draw is reconciled, courts have allowed the employer to subtract the draw from later commissions (Levy). Your plan must state how often the draw is reconciled (§ 191(1)(c)).
• Taking a shortfall out of your base pay, or demanding it back after you leave. New York's rules on wage advances require a written authorization signed before the money is paid, stating the amount and the repayment schedule, and a way to dispute deductions. Money that does not follow those rules "may not be reclaimed through wage deductions" (12 NYCRR § 195-5.2). How these rules apply to commission draws is not yet settled, so a demand like this is worth a lawyer's review.
• What the Department of Labor says. Its guidance is that a draw “can only be reconciled against future commissions,” cannot be recouped from pay other than commissions, and need not be repaid by a salesperson whose commissions fall short unless the written plan specifically says it must be repaid and describes when (Department of Labor, Payment of Commissions FAQ). That is guidance rather than law, but it is the position of the agency that takes wage complaints.

Can my employer change my commission plan?

Going forward, yes. Backward, no — and “backward” includes a commission you have already earned but have not yet been paid.

Changes that look forward are allowed. An employer of an at-will salesperson “at all times ha[s] the right to fix his compensation, to reduce it or to change it, without assigning any reason therefor”; a cut to the commission rate is “a material change in the terms of that hiring, resulting in a new or a rehiring” (Hanlon, 302 N.Y. at 505–06). More recently: the employer may “unilaterally alter the plaintiff’s commissions prospectively, subject to the plaintiff’s right to leave the employment if he found the new terms unacceptable” (Gross, 204 A.D.3d at 763–64). If you keep working after the change, you are treated as having accepted it.

Changes cannot reach backward to a commission you have earned. That is true even though the money has not been paid yet, and even if it is not yet due. In Gebhardt the salesperson booked a deal at a 13% rate, and the company later cut the rate: “When that deal was ‘booked,’ the commission rate was established at 13%, and defendant was not thereafter entitled to lower that rate after the 1995 deal was closed.” The employer could change the terms “only prospectively” — so the lower rate did apply to the next year’s business on the same account (284 A.D.2d at 979). The court added that taking the difference out of earned commissions also violated § 193. This is the rule from the rest of this guide in another setting: “Once the commission is earned, it cannot be forfeited” (Arbeeny, 71 A.D.3d at 182).

So the fight in a plan-change case is almost always about when the affected commissions were earned, which is set by your agreement (Pachter). On an account billed over time, commissions may be earned piece by piece as the business comes in, in which case a change can reach the parts not yet earned but not the parts already earned.

The paperwork still matters, though not in the way most people expect. The Labor Law requires your terms in a writing signed by both sides, and if the employer cannot produce that writing when the Department of Labor asks for it, the terms you describe are presumed to be the agreed terms (§ 191(1)(c)). The employer must also tell you in writing about a change to your rate or how it is calculated at least seven calendar days before it takes effect, unless the change appears on your wage statement (§ 195(2)). But do not assume an unsigned change is therefore void: in the Second Department an employee who keeps working accepts the new terms “regardless of the defendant’s alleged failure to set forth the new compensation terms in writing and to obtain the plaintiff’s signature on such a writing” (Gross, 204 A.D.3d at 764). The writing requirements matter most as proof — of what the terms were, and of when they changed. Keep every version of your plan and every email announcing a change.

I was fired, or I quit. What happens to my commissions?

• Commissions on sales you completed before you left are not "post-termination commissions." You earned them while employed, by doing the selling. They do not lose that status because they became payable after your last day, once someone else finished non-sales steps such as delivery, billing, implementation or the customer's first payment. Payability is not entitlement (Arbeeny; Zia-Ul-Haq).
• Reassigning the account does not change who earned it. If the company handed your account to another rep who did not do the selling, the commission you earned is still yours, and the company's own records naming you as the rep who booked or originated the deal are strong evidence (Yudell).
• Being fired to avoid paying you is its own claim. Even an at-will employee may claim that the "termination action was specifically designed to cut off commissions that were coming due" (Arbeeny, quoting Wakefield). These claims usually go to a jury rather than being decided on paper. If your plan makes payment depend on something that has to happen after the sale, see the next question.
• Business you had not yet sold is different. Commissions on deals still in negotiation, future renewals, or new business from an account generally depend on what was agreed (Devany).
• Be ready for the employer's best case. In Linder a salesman lost commissions on customer payments that arrived after he left: for seven years he had received regular commission statements and the company had always paid only when customers paid, so that was the agreed earning point. Whether you ever received the plan or statements, and whether the company applied its rule consistently, can decide the case. The same court went the other way in Arbeeny, where the commissions were tied to placements the employee had arranged before he was fired; the difference was what the agreement made the earning event.
• Payment timing. Final wages are due by the next regular payday (§ 191(3)), and commissions no later than the monthly deadline in § 191(1)(c) (see When must my commissions be paid?). A long hold on a departing salesperson's commissions can itself violate those deadlines.

My plan says I am paid only if something happens after the sale. What if the company made sure it never did?

Commission plans often attach conditions that come after the selling is done: the customer has to pay, the product has to ship, you have to still be employed on the payment date. The first question is not whether the company blocked the condition. It is whether the condition has anything to do with earning the commission, or only with when it is paid. Those are different moments, and the law treats them differently.

First: when did you earn it? When a commission is earned is set by your agreement with the company, which can be written or shown by how the company actually paid over time (Pachter, 10 N.Y.3d at 617). Where there is no agreement on the point, the common law supplies the answer: a commission is earned when the salesperson produces a buyer ready, willing and able to buy — “the default common-law rule that ties the earning of a commission to the employee’s production of a ready, willing and able purchaser” (Pachter, at 618). The salesperson’s job, as the Court of Appeals put it long ago, is “to bring the buyer and seller to an agreement” (Sibbald, 83 N.Y. at 381). So a commission is earned when you have completed the sales work — which can be before the sale is consummated. In Pachter the Court weighed three possible earning points — the client’s commitment to buy, the company’s payment to its vendor, and the client’s receipt of an invoice — and held the first “most consistent with the common-law ‘ready, willing and able buyer’ rule” (10 N.Y.3d at 618). The administrative work that follows — processing, invoicing, collecting — does not change when you earned it, even with no written plan at all.

A caution about the phrase “procuring cause.” The phrase runs through the old cases, but the Appellate Division has held that a salesperson who is not a licensed real estate broker cannot use it to claim commissions on sales that close after the job ends (Devany, 72 A.D.3d at 1009). That holding is about timing, and it fits everything else on this page: you cannot reach earned status after you leave if you had not reached it before. It does not touch a commission already earned — the same page holds that “the plaintiff was entitled to be paid any commissions earned prior to the termination.” The Court of Appeals said the same thing in 1881, and warned that “procuring cause” is a phrase “capable of being warped from its obvious meaning” (Sibbald, 83 N.Y. at 382). Before a commission is earned, an employer acting in good faith may end the relationship, and the salesperson has no claim on what follows even though “he may have planted the very seeds from which others reap the harvest” (id. at 383). The exception is the one described above: where the effort is “rendered a failure by the fault of the employer” (id.).

If you earned it before you left, it is yours — whatever the plan says about payment. A commission that has been earned is a wage, and “[o]nce the commission is earned, it cannot be forfeited”; the “long-standing policy against the forfeiture of earned wages ... applies to earned, uncollected commissions as well” (Arbeeny, 71 A.D.3d at 182, citing Weiner). Steps that come later — the customer’s payment, delivery, invoicing — determine when the money is due, not whether you earned it. If you are fired between the day you earned the commission and the day it becomes payable, you are entitled to it.

Earned is not the same as due, or as final. An earned commission can still be affected by what happens to the sale. If the plan makes payment depend on the customer paying, an earned commission may never become due and owing if the customer never pays. And if the sale is later cancelled, revoked or modified, a plan whose formula provides for it may adjust the commission accordingly — that adjustment is part of calculating the commission rather than a deduction from it (Pachter; Cohan; see chargebacks). What none of those depends on is whether you are still employed. The customer’s conduct and the plan’s formula can affect an earned commission. Your termination cannot.

That holds notwithstanding a plan provision to the contrary. A clause requiring you to be employed on the payment date can govern commissions you have not yet earned; it cannot take back the ones you have. In Arbeeny the court read exactly such a clause to “prevent prospective commissions,” because enforcing it against commissions already earned “would deprive plaintiff of earned commissions” (71 A.D.3d at 183). A plan may say when a commission is earned. It may not un-earn one. The same was true in 1881: a principal may end a broker’s engagement “before commissions are earned” (Sibbald, 83 N.Y. at 384) — not after.

This is also why an employer’s argument that you “accepted the risk” of being let go before payment fails as to an earned commission. Applied there, it is a request to forfeit earned wages, and the law does not permit it: parties are “not free to enter into contracts which violate public policy” (Weiner), and the Labor Law bars an employer from withholding or recovering earned wages outside the few deductions it allows (§ 193).

Second: only if the condition genuinely goes to earning. Sometimes the plan really does make a later event part of earning the commission, and the fight is over whether that is what it did. If so — and the company is the reason the event never happened — a different rule takes over. A party “cannot rely on the failure of another to perform a condition precedent where he has frustrated or prevented the occurrence of the condition” (A.H.A. Gen. Constr., 92 N.Y.2d at 31). That is hornbook contract law, and New York states it without requiring that the frustrating act be independently unlawful — only that it not be justified. The Restatement says the same: where a party’s breach “contributes materially to the non-occurrence of a condition of one of his duties, the non-occurrence is excused,” and it is enough that the conduct contributed materially; the company bears the burden of showing the event would not have happened anyway (Restatement (Second) of Contracts § 245 & cmt. b).

• If the company blocked it by something other than firing you — cancelling or rewriting the order, refusing to deliver, letting the account lapse, steering the customer elsewhere — the rule applies directly.
• If firing you is what blocked it, the right to fire is not a right to get out of the commission. Your commission agreement carries its own duty of good faith, separate from the at-will employment, and it survives the firing (Wakefield, 769 F.2d at 112). A firing in bad faith to defeat the commission breaches that agreement (Sibbald, 83 N.Y. at 384; Arbeeny, 71 A.D.3d at 184). Avoiding the commission need only have been a substantial motivating factor (Wakefield, 769 F.2d at 114). A continued-employment clause “cannot be read to enable the defendant to terminate an employee for the purpose of avoiding the payment of commissions which are otherwise owed” (id. at 112).

The employer’s cases, and why they are consistent with all of this. In each of them the court concluded that the commission had not been earned before the employee left — so they apply the rule rather than carve exceptions from it. In Linder, seven years of commission statements and a consistent practice of paying only on customer payment made customer payment the agreed earning point. In Emic Corp., mortgage originators who resigned had no contract language entitling them to commissions on loans that funded later. Gallagher concerned a stock buy-back price, not a commission; the First Department distinguished it on exactly that ground, because “earned commissions ... cannot be forfeited” (Arbeeny, 71 A.D.3d at 184). And Danco Enters., LLC dismissed a freestanding covenant claim as duplicative of the contract; the better course is to plead the frustration inside the contract claim, as the reason the condition is excused.

One precision worth keeping. Stated without qualification, “a bad-faith firing is a breach” runs into New York’s refusal to imply a general good-faith limit on at-will termination (Murphy, 58 N.Y.2d at 304–05). The argument holds because it rests on the commission agreement — a separate contract whose benefits the employer may not destroy — and, for a commission already earned, on the rule against forfeiture of earned wages, which does not depend on the employer’s motive at all.

The company gave my account to someone else and paid them. What does that mean?

This happens often. The company decides a departing salesperson is not owed the commission, reassigns the account, and pays the commission to whoever took it over. It creates problems for the company that are worth understanding, whichever salesperson you are.

• It undercuts any claim that no commission was due. A company that paid a commission on the sale has shown the sale generated one, so the dispute becomes who earned it. Expect the company to say the second salesperson did the work. The company’s own records of who booked or originated the deal, set against what the second salesperson actually did on it, usually decide that question (Yudell).
• It may not be able to get the money back. New York sharply limits what an employer can deduct from pay (§ 193). An overpayment may be recovered from wages only if it came from a mathematical or clerical error, within eight weeks, with notice, and capped at 12.5% of gross wages (12 NYCRR 195-5.1). A commission the company chose to pay to the second salesperson is not a clerical error. And once that salesperson leaves, the company’s only route is to sue a former employee to recover money it decided to pay.
• So the company can end up paying the same commission twice. If the first salesperson’s claim is good, the company owes it in full — with liquidated damages, interest and fees under § 198 — regardless of what it already paid the second. That exposure grows the longer the company holds its position, and it is often the most persuasive fact in a demand letter.
• If you are the salesperson who took over the account: the company generally cannot take back a commission it chose to pay you by deducting it from your later pay. If a dispute over the account develops, keep your own records of what you did on it.

Can my employer enforce a non-compete, or make me forfeit pay for competing?

New York has no statute banning non-competes as of September 2026. A bill that would void most of them (S9759) passed the State Senate in June 2026 and is pending in the Assembly. For now, courts enforce a non-compete "only to the extent reasonable and necessary to protect valid business interests" (Morris).

Forfeiture is a separate question. An employer may make deferred compensation depend on not competing, and if you quit voluntarily that forfeiture is generally enforced (Morris). If you were fired without cause, it must be reasonable. Earned commissions are wages and cannot be forfeited for competing.

Am I owed overtime and minimum wage?

• Inside, phone, online and remote salespeople are generally owed overtime at time and a half after 40 hours, and commissions count in the rate (29 U.S.C. § 207(e)). Selling by phone, email or video, or from a home office, is not "outside sales" (29 C.F.R. § 541.502; 12 NYCRR § 142-2.14(c)(5)).
• True field salespeople who customarily sell away from any fixed company site are exempt from overtime and minimum wage. They keep New York's commission-payment, writing and anti-deduction protections.
• Retail and service-business salespeople can be exempt from overtime only if more than half their pay over a period of at least a month is commission and their regular rate is more than one and a half times the minimum wage (29 U.S.C. § 207(i)).
• Minimum wage is measured week by week. A good month does not cover a week when commissions fell short (Karic). For 2026 the New York minimum is $17.00 an hour in New York City, Nassau, Suffolk and Westchester, and $16.00 elsewhere (12 NYCRR § 142-2.1).

My pay stubs do not show how my commissions were calculated. Does that matter?

It can, and you can demand an explanation. Employers must give a wage notice at hiring (§ 195(1)) and an accurate statement with each payment (§ 195(3)), and that provision ends with a sentence worth knowing: "Upon the request of an employee, an employer shall furnish an explanation in writing of how such wages were computed." Ask in writing and keep the answer, or the silence. The penalties for missing or inaccurate notices and statements can reach $5,000 for each violation (§ 198). In federal court you must also show that the paperwork failure actually harmed you, for example by keeping you from noticing an underpayment (Guthrie). State courts do not apply that federal requirement.

Can I be fired for complaining about my commissions?

No. New York bars retaliation against an employee who complains, reasonably and in good faith, that the employer is violating the Labor Law, and your complaint does not have to mention the law (§ 215). You have two years to sue, and you must serve notice on the New York Attorney General when you file. Remedies include lost pay, reinstatement or front pay, liquidated damages up to $20,000, and attorney's fees. New York's whistleblower law (§ 740) covers reports of other legal violations and carries punitive damages for a willful violation.

Can the owners be held responsible personally?

• The people who run the business. Officers and managers who control hiring, firing and pay can be personally liable as "employers" (Karic).
• The largest owners. The ten largest shareholders of most New York corporations (Business Corporation Law § 630) and the ten largest members of an LLC (Limited Liability Company Law § 609(c)) are personally liable for unpaid wages — but you must give written notice within 180 days after you stop working, measured from your last day of actual work, and courts do not extend it (Ingvarsdottir). If the company is failing, send that notice early.

What can I recover, and how long do I have?

Under § 198 you can recover the unpaid commissions, an equal amount as liquidated damages unless the employer proves a good-faith basis for believing it complied with the law, prejudgment interest and attorney’s fees, and a judgment left unpaid 90 days after entry increases by 15%. That good-faith exception is narrower than it sounds, and courts read the New York provision the same way as its federal counterpart: the employer must prove both that it actually believed it was complying and that the belief was objectively reasonable, and good faith here means conduct rather than state of mind — the employer had to take active steps to find out what the law required and then act on them. Not having meant to break the law is not enough, and the burden is a hard one, with the double recovery treated as the norm and the single recovery the exception. (Barfield, 537 F.3d at 150; Reich, 121 F.3d at 71; Rana, 887 F.3d at 123, and Vega, 175 A.D.3d at 1146, for the point that the New York and federal provisions have “no meaningful differences”; Martinez, 251 A.D.3d at 406.) The deadline is six years. A federal overtime or minimum-wage claim must be brought within two years, or three for a willful violation (29 U.S.C. § 255(a)), and carries the unpaid amount plus an equal amount as liquidated damages, attorney's fees and costs (§ 216(b)). A federal collective action is opt-in: you are not covered unless you file written consent to join.

I signed an arbitration agreement. Can I still do anything?

Yes. Many commission plans require individual arbitration and waive class actions, and courts generally enforce those clauses. An arbitration clause changes where your claim is heard, not whether you have one. Without such a clause, a commission policy applied to a whole sales team can be challenged in a class or collective action.

Stockbrokers and other registered representatives. If you work for a FINRA member firm, a dispute with the firm that arises out of its business activities generally must be arbitrated in FINRA’s forum (FINRA Rule 13200). The Department of Labor generally does not take commission claims from stockbrokers for that reason, pointing to the arbitration clause in the industry registration form (Department of Labor, Payment of Commissions FAQ). The U.S. Supreme Court has enforced that kind of registration-form clause against a securities salesman suing his former firm over commissions, holding that the Federal Arbitration Act overrides a state law that guaranteed wage claimants a court; it reversed the judgment refusing arbitration (Perry v. Thomas, 482 U.S. 483, 490–91 (1987)). There are exceptions. A statutory employment discrimination claim is not required to be arbitrated there, and neither is a dispute under a whistleblower statute that prohibits predispute arbitration agreements (Rule 13201). Class action claims, and collective actions under the Fair Labor Standards Act, may not be arbitrated in FINRA’s forum (Rule 13204). An earned commission is still a wage; FINRA arbitration changes where the claim is heard.

Should I go to the Department of Labor or to a lawyer?

Either, and sometimes both. A complaint to the New York State Department of Labor is free, and it is what triggers the presumption in your favor when the employer has no written plan. A lawyer can pursue liquidated damages, fees and personal liability against owners, and can move quickly on the 180-day owner deadline.